New Delhi – The war in Ukraine reshaped Europe’s security architecture — and rerouted the global oil trade. Nowhere was this shift more profound than in India. In a matter of months, New Delhi transitioned from importing almost no Russian oil to relying on Moscow as its top crude supplier, shielding its economy from global price surges and stabilising domestic fuel costs.
That strategic pivot delivered India affordable energy at a time when much of the world battled runaway inflation. But in 2025, that very policy is under growing international pressure. U.S. President Donald Trump has announced a sharp escalation in tariffs — doubling duties on Indian goods to 50% — explicitly tying the move to India’s continued oil imports from Russia. The White House is also weighing secondary sanctions, which would penalize countries and companies engaged in trade with Moscow. Such measures could directly impact Indian refiners, shippers, and banks.
As pressure mounts, a critical question arises: What happens if India is forced to cut back or halt its Russian oil purchases? The ramifications would be felt far beyond South Asia.
From Marginal Supplier to Energy Lifeline
Prior to the Ukraine war, Russian crude accounted for less than 2% of India’s oil imports in 2021, according to the Petroleum Planning and Analysis Cell (PPAC). By mid-2025, that figure surged to between 35% and 40%, translating to around 1.7 to 2 million barrels per day.
In June 2025, India’s Russian crude imports peaked at 2.08 million barrels per day — the highest in nearly a year — representing 44% of its total crude intake, Reuters reported. Between 2021 and 2024, India’s Russian oil imports grew nearly 19-fold.
“India saved up to $33 billion between 2022 and 2024 through discounted Russian oil,” said Petras Katinas, energy analyst at the Centre for Research on Energy and Clean Air (CREA), calling the move a calculated exercise in balancing global alliances with national energy priorities.
Why Replacing Russian Oil Isn’t So Simple
Crude oil is not a uniform product. Indian refineries are tailored to process specific grades — particularly Russian medium-sour crude like the Urals blend, ideal for producing diesel, which powers much of India’s transport and agriculture.
A sudden cut in Russian supplies would force India to seek similar grades from the Middle East, West Africa, or the U.S. Gulf Coast — likely at higher prices and with fierce competition from other importers.
Switching suppliers isn’t as simple as flipping a switch. It could require renegotiating contracts, adjusting refinery configurations, and rerouting global shipping patterns — changes that take time and money.
The Global Domino Effect
India is not just a major oil consumer — it's a global refining hub. A substantial portion of its Russian crude is refined into gasoline, diesel, and jet fuel and exported to Asia, Africa, and even Europe. In 2023–24, India supplied approximately 15% of Europe’s diesel imports.
A reduction in Russian oil intake would constrain India’s refining output, tightening fuel supplies globally and increasing costs — particularly in Europe, where diesel inventories remain low.
On the supply side, Moscow would be forced to find new buyers for volumes currently sold to India. While China could absorb some, its capacity is limited. Other nations would demand deeper discounts, potentially forcing Russia to scale back output and further constrict global supply.
Could This Trigger Another Oil Shock?
The ripple effect could mirror the upheaval seen in 2022 when the redirection of Russian supplies pushed Brent crude above $120 per barrel. Analysts warn that if the roughly 5 million barrels per day Russia exports were abruptly removed from the market, prices would spike amid a global scramble for alternatives.
Even with OPEC raising output, replacing such volumes swiftly would be extremely difficult. “There is nowhere to get those five million barrels fast enough to prevent a spike in oil prices,” said Alexander Kolyandr, senior fellow at the Center for European Policy Analysis.
According to the U.S. Federal Reserve, a $10 increase in oil prices adds roughly 0.2 percentage points to U.S. inflation. In a worst-case scenario, if Brent surged from $66 to $120 per barrel, global inflation could rise by up to one percentage point, raising costs across sectors from transport to food.
Beyond Oil: The Freight and Trade Impact
Energy trade reshuffles also distort global shipping routes. Redirecting Russian oil from India to China or Africa lengthens voyages, tying up tankers and reducing capacity for other goods. This “ton-mile” increase can drive up freight costs even for unrelated commodities like grain and metals — adding another layer to global inflation.
Tariffs and Sanctions: The Trade War Within the Energy War
President Trump’s latest executive order doubling tariffs on Indian exports has intensified tensions. According to a report by the State Bank of India (SBI), a 50% tariff on Indian pharmaceutical goods could slash earnings by 5–10% in FY26. As India supplies 35% of U.S. generic drug demand, the tariff could also raise healthcare costs for Americans.
Secondary sanctions, meanwhile, could expose Indian firms — from refineries to shipping companies — to exclusion from the U.S. financial system.
India and China Push Back
India has rejected Washington’s accusations, accusing the West of double standards. Despite sanctions, the European Union still imported billions worth of Russian LNG and pipeline gas in 2024–25.
China, the largest buyer of Russian oil since 2022, remains less vulnerable to secondary sanctions. With over $580 billion in U.S.-China trade and control over critical minerals, Beijing retains greater leverage in negotiations.
The Cost of Compliance: What India Stands to Lose
If India were to halt Russian crude imports entirely, its fuel bill could rise by $9.1 billion in FY26 and $11.7 billion in FY27, according to SBI. The spike could inflate prices, widen the fiscal deficit, and strain the rupee — consequences that could reverberate across the economy.
Globally, the loss of India’s refining output from Russian oil would further tighten fuel supplies, especially in diesel-dependent economies like Europe.
Is an Abrupt End Likely?
Industry analysts say a sudden stop in Russian oil purchases is unlikely. The challenge is less about political will and more about infrastructure and market mechanics. Finding and integrating 2 million barrels per day from alternative sources would take months of contract renegotiations and logistical overhaul.
“It could take up to a year to significantly reduce Russian reliance,” Sumit Ritolia of Kpler told DW. “I don’t see us going down to zero anytime soon.”
Instead, India is likely to pursue a phased reduction strategy — gradually trimming volumes, diversifying suppliers, and coordinating with global producers to minimize market disruptions
Conclusion: A Slow Pivot, Not a Sudden Exit
An abrupt halt in Russian oil imports would send shockwaves across global markets — from spiking crude prices to inflated freight and fuel costs. But a managed transition, while complex, could preserve India’s energy security and help the world avoid a repeat of 2022’s volatility.
New Delhi’s next steps will not only shape domestic economic stability but also influence global trade flows and inflation trends in an increasingly interconnected world.
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